POV: Facebook Watch

Mindshare Point of View

Background:

Facebook has introduced a new video hub offering some U.S. users - short episodic series from content partners including A&E, Major League Baseball and National Geographic.

Details and implications:

There is a growing recognition that premium content – whether viewed through an OTT service or a social network - is king.

We all love Netflix; Twitter held its first Digital Content NewFronts this year; Amazon Prime took live Thursday Night Football off Twitter; Apple has a $1bn war chest to make at least 10 new shows and now Facebook wants you to watch more premium video too with the launch of Watch.

The idea behind Watch is to create a space on Facebook where users can follow and discuss original shows, which can then be shared via their news feeds and in Facebook groups. The shows will be categorized by social style metrics such as what’s most talked about, what friends are watching and what the user is following.

The service is unlike some others as Facebook follows is platform approach – it has paid to seed some of the original content that will appear, but eventually will roll out Watch to more users and show producers. Initial shows include My Social Media Life, a reality show about internet celebrity David Lopez, and Great Cheese Hunt, in which Business Insider seeks out some of the world’s best cheese.

As with other products like Instant Articles for text-based content, the revenue model for Watch is a split of advertising between the platform and the publisher.

Due to the short form nature of the content and the revenue split model, many industry watchers are comparing Watch to YouTube. However, Facebook will be hoping that the power of the product will be by being able to see what friends are watching, and then to socialize around the content – something that YouTube does not offer.

We would recommend that brands who currently use in-stream advertising keep a close eye on the early tests taking place in the US to understand the opportunity Watch creates form brands to expand their reach in a new environment.

Summary:

Watch offers a new way for users to view video content, with a focus on socializing the experience and tailoring recommendations based on your network. For advertisers, it offers an extension of their current in-stream activity, against content that in some cases will be exclusive to the Facebook Watch environment.